This invention relates generally to tax audits and, more particularly, to network-based methods and systems for managing tax audit information.
At least some known business entities are required by law to remit use tax money that has been collected by the business entity to an appropriate taxing jurisdiction. These business entities may also be required to maintain certain information relating to the taxes paid to assist the business if audited by the taxing jurisdiction. The information the business entity is required to maintain is known as tax audit (TA) information, and it may include at least business information, amounts remitted to the taxing jurisdictions by the business entity, invoices, exemption certificates, and any other documents or information relating to use taxes involving taxing jurisdictions and the business entity. Historically, such information has been maintained in paper form. For business entities that have numerous facilities in various taxing jurisdictions, maintaining such information can be difficult and costly.
When audited, a business entity may be required to provide the auditor from the taxing jurisdiction with TA information. This might require the business entity to send numerous boxes of TA information files to the auditor for review, or might require the auditor to travel to the business entity to conduct the review. The auditor will typically review the TA information, including the amounts paid to the taxing jurisdiction along with the supporting documentation, to determine whether the business entity has paid the correct amount to the taxing jurisdiction, underpaid the taxing jurisdiction, overpaid the taxing jurisdiction, or whether the records are incomplete. During the auditor's review of the TA information, the auditor might also make handwritten comments on the TA information provided by the business entity. For example, the auditor may indicate on the TA information that additional information is needed from the business entity to further evaluate the transaction, or the auditor may request an explanation as to why taxes were or were not paid. The TA information is then returned to the business entity to enable the business entity to respond to the auditor's comments and/or findings.
For business entities having numerous facilities located in multiple divisions worldwide, managing TA information, providing TA information to multiple auditors within multiple taxing jurisdictions, reviewing comments and findings from these auditors on multiple business transactions conducted throughout the world, responding to those comments and findings, confirming that the proper amount of tax has been remitted to the proper taxing jurisdictions, and confirming that the business entity is in compliance with applicable tax laws and regulations and/or internal business standards and policies, may be a formidable task.